tv FOX Business After the Bell FOX Business January 2, 2013 4:00pm-5:00pm EST
nicole: i hate to speculate, but down 45% and sometimes the ones that are beaten down are the first ones to be taken back up, and so today hewlett-packard jumping leaving the dow. david: let's talk about apple, question into a lot of people were selling in 2012 hoping to lock in their gains, a lot of people said they would buy again. it seems to be what is happening. >> have been not only with apple but the major market averages overall. companies that were very good companies to lock in the tax rates. i have a feeling you will see cash on the sidelines. liz: and zipcar agreeing to a deal with avis. nicole: that is right. avis hitting a new high.
david: believe it or not, we may top 300, trading, just popped over 300, 304, 307 and continues to go up so we're settling up today, that is always a good sign. look down here, number three on the list, the tech heavy nasdaq really popping. a lot of other stocks to look at, but all of these, what a wonderful way to start the new year. lots of people locking in their gains last year, the lower tax rate, a lot of people said they would buy it, and that looks ite exactly what is happening but we have to focus on the nasdaq. liz: the small and mid-cap index shooting up so high today, that is a record close and the last one april of 2011, so those names looking very good and for people who sold out and got out of stocks, they were losers
today, they missed a major rally particularly in the small and mid-cap names. david: oil got a nice pop today, congratulations to you settling higher by 1.4% closing about $93 per barrel. liz: the rally started overseas while many of you were sleeping, germany did it beautifully hitting a five-year high. an 18 month high. david: everybody is happy. liz: don't forget asia and hong kong hitting a 19 month high. what a day for the global market. the deal in washington, you can credit that, whether you like it, has pushed many investors. where does that leave the u.s. dollar especially with one that is gearing up for a debt ceiling battle. we have an all-star panel to let
us know what currencies are going to rise and which ones you need to steer clear of read david: you will not believe it, and it did not save any of us from higher taxes, those who pay taxes at any rate. if you paid income taxes last year, you're going to be paying more this year. coming up, bill harris letting us know how to keep as much profit as possible in your pocket. liz: what drove the market with the "data download." happy new year, by the way, from "after the bell." investors flooded the market following the fiscal cliff deal. ending the day at session highs with more than 300 points posted the second straight day of triple digit gains. all major indices closed up more than 2%, all 10 s&p sectors let higher led by technology and telecom. construction spending actually fell for the first time in eight months in november dropped 0.3%
annual rate $866 billion but weakness in the business sector out weighed the business growth. the u.s. manufacturing sector returning to expansion last month inching up to 50.7 from 49.5 in november. any reading above 50, we will take it even though it is slightly above indicates expanding activity. david: we have peter barnes live in washington with exactly how much your taxes will rise next year. giving us their favorite stocks to kick off 2013, but let's start where the action really began. no doubt what happened inside the beltway affected the market. how much will we be paying? peter: we have a whole bunch of taxes this year including from this week's tax bill, starting
last night, looking at their impact on different income brackets for each hour of the day today. this hour we're wrapping up with millionaires and billionaires. household income of a million dollars annually or more covering 300,000 households filers. the big change that will affect them is restoration of the top marginal tax rate of 39.6 from the clinton era for individuals making more than 400,000 per year are from is making a $450,000 for those taxpayers also said the raids on the cap gains and dividends rise to 20% from 15%. unrelated is a new tax on the president's health reform law. the medicare surcharge on investment income for individuals making more than $200,000 per year. come is making more 250. the tax increase that ill hit pretty much everybody, lower income as well as upper is the
expiration of the payroll tax cut from the last two years hitting anybody with a paycheck from $10,000 to a billion dollars. so for the households earning more than a million dollars or more per year according to the tax policy center, their taxes will go up on average by $170,341. no surprise if you're including billionaires. david: we should include even millionaires and th william ayes once he taxes go up on the first 400,000 for individuals or $450,000 for families. correct? >> right. for a billionaire, i think that is tipped money. david: thank you peter barnes. you can see specifically however id of other income brackets, perhaps your bracket is there.
being hit with the higher taxes, even people below $400,000. liz: check it out. stocks a big rally following the fiscal cliff deal. we have mark sebastian joining us from the pits of the cme. david: chief investment officer. and a senior vice president, bringing us specific stock tips for us. first of all, mark, he said there would be a big rally one way or the other depending on how the cliff deal went. the rally on monday with rumors of a deal, and then a huge rally over 300 points, is this where we rest for a while? there was lots of upward momentum as we closed the rally day. >> the option across the street was something called gamma, sliver out buying futures.
i would not too much faith on that. i'll be watching tomorrow to see if he can continue to hold that level in the futures. what a move we saw, there was a big panic on friday after the bell we s&p futures sold off another 12 handles. since that low, the market has rallied over 5% in the futures. that is an incredible move. the vix has lost a full third of its value. what's a set point us toward? decreasing realized volatility. a big pent up demand for a market move. we have tax clarity, news clarity, we get a massive pop and now we start to ease a little higher, probably our major resistance level is september 2012 high of 1475.
that will be our next test assuming friday's number. now that taxes are over we can look at things like economic data. crazy, right? that is coming out on friday, the next determent if we hold a 1450 or if some damage is done. liz: imagine that, real fundamentals. versus just something inside the beltway jerking us around on a leash. how do you think the precious metals and the base metals might do now that there is a deal? would that copper, crude oil, we had a two week high. you're looking at some real movement. what won't do well? >> precious metals are very interesting specifically. we saw a lot of people selling
ahead of the cliff deadline in gold. that was a major fundamental problem. a couple of really ugly days at the end of last month gold calld managed to hold the moving average threatening 1700 again. i think gold if you like money printing, no deficit reduction plan and a patched tax deal, you've got to like gold. crude i'm a little less bullish on. that is a weak dollar play, but we have so much reduction in the u.s. right now, have to wonder if they can threaten those. david: will be talking about oil coming up, but i want to bring you in here because the main issue is opportunity versus risk, what will we have more of? so much of the bad news getting jerked around by what those guys inside the beltway were doing, at least for the moment that is over. does that mean 2013 will provide
more opportunities than risk? >> i certainly believe so. liz mentioned earlier if you missed today's rally yet given up a good bit. what most people don't talk about, the stock market at 13.5%. that was not such a bad return. if you focus more on the headlines in some concerns about what is going on in washington you lost last year. david: where is the opportunity for 2013? >> tremendous opportunity is natural gas. it has not been the place to be. but now what w we're starting to see is basic economics, supply come down and demand is going up. the one thing with president obama getting reelected, there are certain epa mandates force utilities to put scrubbers in the coal plant, think the demand fix the natural gas looks great in a competitive
advantage the country has going for it. liz: i want to believe you. we were on the trading floor one year ago and i heard the exact same thing and it really didn't happen. what will be the catalyst especially when more and more companies are drilling for this stuff. >> i would argue the opposite. more and more are drilling for oil but if you look at this country is actually down. natural gas guys are down even more. what makes it different this time, that is getting back to basic economics. supply will go down simply because demand has gone up because utilities are using more. david: let's get specific, specific stocks. i assume coal, copper, iron, you name it if you're involved in building materials they have the raw materials for it. is that a play on the global economy expanding?
joy global. i guess we're having some trouble with his hearing. let's talk a little bit about your pics, your natural gas play, tell us why you like it. why is southwest the best? >> what you want to look at in the difficult times or low-cost producers. you want to avoid the higher cost players because it will take in more time to make money. they should have decent growth going forward. liz: is there any bit of money you would say i will commit some of that they really risky amount, what would that be? speak we have some listings as well as a uk grocer.
david: i'm sorry, we want to give john a chance to come back. now it is working. specifically joy global cometh a, that aplay on global expansi? >> yes, indeed. joy global is a company that has positive exposure to improving living standards and infrastructure development and urbanization's with the emerging markets. particularly china. lead in the manufacture and servicing of high production mining equipment. iron ore, copper, coal, some of the things people need to keep the global economy humming. it has a long track record of improving producing equipment improving safety and productivity and stock price at this point we feel is very attractive because it is down on the fears abated to growth
concerns in china. which are overgrown at this point in time. liz: you're talking about a growing global consumer eating more. now they're eating twice or even three days, is that an opportunity? >> we view that as an opportunity. traded sideways to down over the last year or so. a lot of reluctance to commit to longer-term assets. it provides a key ingredient needed in agriculture, improves crop yield, 7 billion people on the planet and the number growing 75 million per year we think that it's going to be a key need going forward. they have about 300 to 400 years of production or reserves in the asset base.
we see that as a highly valuable asset. david: thank you very much. we will see you again in s&p futures close. good to see you all. liz: much more coming up right here on "after the bell." ♪ [ male announcer ] this is karen anjeremiah. they don't know it ye but they' gonna fall in love, get married, have a couple of kids,
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david: the s&p futures are closing right now. mark sebastian at the cme group, what is happening? >> there was a lot of trading but not a lot of movement. not to be surprised after the big push we had at the end of the day. pay really close attention to the economic data this week. two months before the next debate we can pay attention to fundamentals. trading should be really fun for at least the next few weeks. david: thank you very much. liz: look at these, they got a boost today. the floor of the new york stock exchange. how do you think it is doing? nicole: very interesting. intel will be on one to watch because we're starting to hear headlines something new for intel. up 3.7%. you have the idea here they are working on set-top boxes.
moving into a whole other realm it'll be interesting to watch it. this could outshine apple tv. will this be a direct competitor? one that we will continue to watch based on the news we are watching. be developed by intel media. we will learn more and more about this, but something that we want you to watch. something that may be brought up as well. liz: that is exactly what we think will happen. david: that is all apple needs. nicole, thank you. eight new taxes are underway to pay for the new health care law. including a sales tax on medical advice. liz: you talk about the medical costs to consumers. >> talk about the sales tax and
revenues even if they are not making profits and even if they are spilling red ink. it will only lead to fewer jobs, reduce investment for higher health care costs for consumers. taking us exactly in the wrong direction. we already know they have done layoffs and the like, but this effort from the health care industry did nothing to stop the tax rates rolling down the hill, and look you can see bunch according up and down as the lobbying effort rolls forward. some volatility in the stock, but what is interesting about the eight tax hikes coming in today, some of them really are directed or will be hitting the middle class. talk about things like the flex accounts being capped, 2.3% tax that we are seeing uncertain investment income.
the question will this really hurt the market going forward. when using the nicolette dime stuff it is buried in tax bills we will have to say maybe not, because it isn't coming to the surface yet. david: mini came out for obamacare, they saw such a huge increase because of obamacare they were willing to do just higher taxes. >> that is what the logic is for obamacare. insurance industry will get more coverage for medical devices, more revenues we have to pay back some. liz: it did not appear they had too much trouble even though they did endure volatility. >> exactly. 800 groups and the ceos writing to congress. you can't do this medical device tax, you're treating us like cigarette and alcohol.
we will be watching that one for you. david: elizabeth macdonald knows about taxes. >> and today is my birthday. i get a lot of free gifted christmas gifts. send them my way. liz: we have a fiscal cliff deal, but a huge battle is just round the corner and the stakes may be even higher. government spending could come to a halt. of course you're talkin are tale debt ceiling. the u.s. dollar and other currencies. david: plus we have a guest expert who says prices will drop below $3 per gallon even while oil prices are going up. but it may not take us all the way up to 2014. why are gas prices going down when oil prices are going up?
david: well the euro touching a two week high in intraday trading and the u.s. dollar index posting slight gains after lawmakers approved a last minute fiscal cliff deal but the political showdown is far weeks away one of the best ways to make money in the currency market this year. liz: last week we had
somebody who said buy the south african rand. we have a senior for ren currency strategist and they have got some ideas. before we get to your favorite picks let me tackle the dollar. every time we do quantitative easing, that tends to be dollar negative, very low rates. we don't have a strong dollar at the moment in trade, but what do you think about the u.s. to rar right now? nick, you first. a bit of a mixed picture. easing will be nech for the u.s. commodities and euro. so maybe the dollar will hold up against those currencies. david: chris, what about you, what do you think about the dollar. >> i have to be in agreement with our fellow guest there. when we look at the dollar specifically. we're here race to the base globally. specifically with the bank of japan and potentially
later in the year with the ecb and maybe even the boe steps back into it. so the dollar's probably likely to remain relatively weak versus some of these but it is definitely a pick 'em type market. david: nick, chris brings up japan which is fascinating because as folks who have been noting might realize it, they are actually going to be printing money even more than we have been printing money and yet you say, nick, selling the euro is a better option than selling the japanese yen even though japanese yen's value will go way down because of all this currency printing. why? >> i think the issue with the japanese yen, certainly fundamentals are negative in terms of the economy and in terms of what the central bank is doing of course the japanese yen moved very quickly short space of time. dollar-yen from 79 all the up to 87. i think in terse of the euro we're certainly i think at a stronger starting point, a higher starting point. so i think there is more potential for that currency to fall. of course the eurozone
economy remains in the recession. it will be an underperformer for the year. liz: if i want to dip my toe into currency investing which one would you go long, which one would you go short? >> that is a pretty loaded question. when we look at the markets there are a few different ones people talk about the euro-dollar and dollar-yen. these are currencies that have potential market moving consequences the next week or two weeks or some with respect to what the u.s. is doing here we want to look at currencies that have exposure to the u.s. that would be canadian dollar and mexican peso. since they have ramification with commodities and crude oil and trade flows, they might stand to benefit next three to six months going forward. with respect to the looney, which is the canadian dollar. if we get 96 we may test some 2011 low there with dollar. maybe something towards the
4 handle. david: nick, what happens if this rally is short-lived? >> in terms of you want to go for the short term optimism as far as the canadian dollar and mexican peso as the guest suggested. i believe beyond that you're definitely looking at short euro position certainly being a good play. beyond the short term enthusiasm we've got that whole fiscal cliff debate coming up again very shortly by the end of the february. so i think the boost in the currencies will be relatively brief and we'll see further declines. liz: brazil, the real was a great trade two years ago. certainly people really liked that idea. do you look at some of the south american nations and say boy, they are screaming growing in a big way? >> well we do. we like the mexican peso. the chilean peso is another country we see strong growths and steady interest rates. the brazilian real can recover but to be fair place it along mexico and chile it
is probably an underperformer. liz: okay. david: chris, ifs australia, and china continues to improve and australia continues to proindividual them with materials they need to go are you putting money in the australian currency. >> we have to be very strategic here. considering we got off the fiscal cliff we don't want to get off the dollar bearish bandwagon. we have probably a six week period we could see substantial dollar weakness and i think the aussie could be a major beneficiary. liz: before we go, we want to explain to people. nick it is 2 trillion dollar market but now it is $4 trillion market and largely unregulated, correct? >> there is lot of over-the-counter trading not through the exchanges. certainly sort of over-the-counter trading so in that sense it doesn't go through a central clearing system. you're right, 3 to $4 trillion a day. david: chris and nick.
i like the italian pronounciation of your name. thank you. good to see you both. happy trading. >> thank you. liz: the tax code is getting more complex, is that possible? yeah, thanks to washington. how can you protect your money? up next we have got the ceo of personal capital, bill harris. the former ceo of intuit and paypal. and don't forget log on to facebook.com/after the bell. let us know, click on the like button and let us know if you're happy with the deal reached in washington. ♪ .
liz: yeah, it was touch-and-go and i don't think rich edson got any sleep. nor did bret baier or. david: chad pergram. our producer. liz: all of our team watching. yes it happened, washington agreed on a deal to avoid the country going over the fiscal cliff. our next guest says it would force the country to get our fiscal house in order. did we? is the new deal enough? david: we have bill harris, former ceo of paypal and intuit. he is not in new york today. as you can see he is in san francisco. bill, you were among those who thought this crisis might lead to some kind of restraint on spending. not so, bill. in fact there is going to be more spending.
if you throw the sandy bill in. there are a lot of good people in the new york area who need the sandy bill but it will feed a lot of bureaucracy in washington as well. is all hope for cutting spending lost? >> well, it is only half a loaf but i think there is a lot to like in what happened last night t should have happened a lot sooner than that and, unfortunately i think washington is becoming the entertainment capital of united states. i hope that moves back to hollywood. but within, what we did get and you're right, only the tax increase. it is not the spending cuts and entitlement restraint that we need but what we did get was 3/4 of a trillion dollars of deficit reduction. david: whoa, let me stop you there, bill. you're assuming that this new revenue is going to reduce the deficit. i don't assume that at all. in fact if you look at history, the more money that comes in the more goes into flue spending rather than reducing the deficit.
>> well you're absolutely right and we absolutely need to do the next step which is spending reductions and enlightment reform. liz: do you think that will happen? >> i do. liz: in what form and what would you like to see? what do we really need to see and do you think they will tackle the big heavyweights, the whales, the social security and mediccre, waste and fraud, et cetera? >> i think we have to. we have an aging population. we have no choice. it is not, it is not a problem unique to the united states states. all the developing nations have the same problem of aging population. as a result of medical increases and standard of living and all that. but we need to take note of the fact that people are living differently and working longer today than they did in the 30's when social security was put in place. liz: very true. very true. david: bill, i grew up in washington. maybe that is why i'm so cynical about the place. the fact it is usually not
until there is an absolute crisis that people react. when the washington government shut down and they closed national parks, that is when they got serious about things in the past. we have not reached that point yet. are we likely to? is there likely to be an event in 2013? for example a bond crisis? a big increase in inflation or something that will force them to do some real deficit reduction? >> well, i think what, what forces them the sequestering. as well as the deficit ceiling. liz: okay. i've got to ask you because i love looking at your bio seeing that you had been the ceo of intuit which of course owns quicken. who among us at some point hasn't used quicken. what does this do to the confusion or simplification at least in a small way what people believe they will pay? some ceo's think, i just need to know what my tax rate will be. then they can proceed. now we do. >> tax certainty is really important.
liz: it is huge, right? >> especially for businesses when you're trying to do multiyear planning. we have a bunch of tax certainty coming out of this bill. so i think, i think there's good news on many fronts. i will say though in terms of the tax simplicity we have not achieved that. in fact it is even more complicated. there are more ordering rules and the people at turbotax, i used to run turbotax, people at turbotax will have trouble getting their releases out in time this year. david: that is a very interesting point. the accountants love this. the turbotax folks, they will have trouble but i'm sure they love it, it is a lot more confusing. we're going in exactly the opposite direction of tax simply faycation, right? >> that's right. it takes me back. in 1992 i was taking chip soft, the precursor to intuit public. we made turbotax. at the time jerry brown was a candidate for president. and he was endorsing the flat tax.
and. david: i remember. >> i was queried bit visitors i was talking to, gosh what happens to turbotax if there's a flat tax? i said anyone in the room who seriously believes that the congress of these united states is going to significantly simplify the tax code should not buy the stock. david: it is amazing you remember, that jerry brown was for a flat tax at one point. of course he has gone in the op sit direction. great to see you, bill. liz: happy new year. >> thank you. liz: doesn't that put it in perspective. david: sure does. again, jerry brown for the flat tax. imagine jerry brown and steve forbes same arena. liz: it would simplify things in so many ways. david: of course. we're going opposite direction. liz: lobbyists would not allow it to happen. david: looks like your taxes are going up a bit this year but you could get some relief at the gas pump. it is something anyway, right? we'll tell you exactly how much coming up. liz: ipo activity, initial
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to avoid long-term injury, seek immediate medical help for anrection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swellinof the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about alis for daily use and a -tablet free trial. liz: despite a 29% drop in the amount of funds raised and a year-over-year decline in offerings, we're talking about ipos, there was still lots of money to be made in initial public offerings last year. take a look at the big returns for the year's best performing ipos. you hear of proto labs? it led the way up more than 146%. then you see guide wear, home street bank, nation star. little did we know, proto
labs. what lies ahead for 2013 and could there be another market that could produce hefty returns for you that might not be as risky as jumping into an ipo? david menlow, president of ipo financial.com. i tell you something, we go back. >> please. liz: 1998 and 1999 the go-go era of the globe.com. everyone thinks if i get if on early does that still ring true? >> no, it doesn't. the technology has ripped this market apart when it comes to information and everybody knows that they want a slice of the pie now and that pie seems to be getting smaller and smaller. so yes, you know about the deal but maybe you get 100 shares. what's the point? liz: 100 shares. what is the point there. let's talk about the ipo market. here you have, since 2006 certainly there was a slowdown from 2010, down, 11, 2012, another slowdown. what do you expect for 2013. >> for 2013 the money is
vibrating in everybody's pockets and in the cash balances of these brokerage firms and accounts, what have you. we're going to have a slight upward bias toward deals that are going to come public, but again it will be a very selective market and it is very clear that investors rule the roost. it is no longer issuers. liz: we never really know, okay, who will come public. there are names. david literally ran in just handed me the list. i will name some of them for you, twitter. everybody talked about. do you think they will pull the trigger and go public. >> i think at some point they are. this is the situation, but they will come out with a small offering relative to the market valuation. it will not be another facebook. liz: gilt groupe, we know they stumbled, did they miss their window. tableau, monkey. those names. you say there is better way to come into something that is not necessarily an ipo
but still sort of a fresh opportunity? >> right. the syndicate market is not just about ipos. it is about companies that are already public that say we need more money and come to what is called the secondary market. could be any company trading now, nasdaq any markets here in the u.s. they say we would like to issue, 15, 20, 30 million more shares because of capital improvements, acquisitions deleveraging, whatever it might be. these offerings are outstripping ipo pricings on a scale more than five to one. it is not getting any media attention because it doesn't have the pizazz. liz: tell people how they can invest in secondary offerings, what to look for. >> first if you have a brokerage account, doesn't mean that the broker you're dealing with if you're speaking to somebody is somebody that is wired into the syndicate department. if you want a secondary offering of a company that will issue more shares you really have to ask, do you get syndicate allocations. if the broker says no don't
even step any further. you have to find brokers that are wired in. once you do, you will end up getting greater allocation. >> we noticed around 4:15 in the afternoon on whatever day that's when they announce secondaries. then there is a limited windows is there, before you jump in and buy some of those shares? >> i used to have all black hair before all that happened. this is very difficult period. these are overnight offering spots or blocks that come out and institutions generally have all the inside tracks on information know absolutely nothing. liz: something people keep their eye on? >> they have to be on a distribution list from brokers they deal with? liz: so get a good broker. >> you have to basically be aware, have to ask them and have to act quickly. this is where we're putting 90% of our resources because nobody get this is information. liz: secondary market offerings, david menlow, thanks very much. with news we hope everybody can use. thank you. david? david: will 2013 be the year of cheaper gas prices?
we're starting the year with oil prices going up and gas prices going down. it is now about $3.30 a gallon. find out why this is happening and how much lower gas prices could go before oil prices start pushing them back up again. a look at a very cold start to the new year. keep it right here on fox business.
david: brent crude oil hit a 11-week high after lawmakers averted fiscal cliff. why are prices at pump going down when oil prices are going up? joining us now the nus consulting co-president. richard, good to see you. >> thanks for having me. david: this is a dilemma. we've seen oil prices go up significantly and gas prices coming down. >> gasoline stockpiles have been going up all month. we were as low as 210 million. now we're at about 223. in last three or four weeks stockpiles are growing quickly. david: why is that. >> there is more through-put. back up to winter gasoline and i think the backup cleared its way through. stockpiles are growing, yeah. as a result of that we're seeing prices come down a bit but more importantly usage is coming down. we've seen last november, last month is two months ago, last statistics we saw the gasoline usage is the lowest since year 2000. only 8.5 million barrels a
day were consumed. we're seeing stockpiles grow and consumption dropping. david: you think the price may be below $3 a gallon? >> i see things slightly different than some the previous guests. we think the price of oil will slide in the first half of the year. yes, we dodged the bullet on the fiscal cliff but we still have on coming train which is the debt ceiling. with that we have got increased taxes. real headwinds in the economy, new taxes coming in. payroll tax will come back, put that all together we think economy will have significant headwinds. thaa will slow things down. a lot of unresolved issues still in europe. supply is plentiful. demand is slack. with that we think oil prices slide. only two things supporting price today are the fed which has really aggressive easing policy. and political tensions. real issues in the middle east people are afraid of. david: folks. so you just don't think he is speaking his mind based on nothing, this guy is paid a lot of money by companies all over the world to
consult with them to give them idea how much they will pay for gasoline in the future and i'm wondering if companies like airlines and fedex, all the transport companies are going to benefit tremendously? their stock might benefit from this 2013? >> look, people really heavy fuel users, airlines as you said, transportation companies, delivery companies they will certainly benefit. they certainly hedged a portion of their consumption going forward out so they wouldn't benefit completely from this but they will take some benefit from it. really our clients are focused on the natural gas markets, electricity markets, oil markets themselves. there are large manufacturers and retailers. what we council them, don't purchase all the needs going out next six months. take advantage of some of this decline. we want to be partially hedged, not completely hedged. so we get pullback in the market as it occurs. david: we heard a lot of optimism here about natural gas and for good reason because we're finding we have so much of it here in the u.s. and chinese have a
lot of it over there. when do price pressures from glut of natural gas begin to impede on oil producers? when do they permanently bring down the price of oil and thus gasoline? >> what you're seeing switchover from coal to natural gas. electricity generators they have been moving over because much more cost effective to move gas. david: when does gnat gas put pressure on gasoline? >> i'm not sure it will until we have a domestic energy policy that sort of supports this transition. you know the people, pickens plan talks about the transition of you know, heavy trucks, eight teen wheelers to liquified natural gas. that is great idea. they run constantly. big road fuel hogs. but no one will do that in a large way until the infrastructure support that. why would you convert your trucking fleet if you can't fuel it up? david: there are questions about, so much money being poured into the natural gas right now and research. if they found a way of
making liquified natural gas much easier to make, much cheaper to make and therefore gave the natural gas companies in the u.s., a excuse a reason to export it overseas wouldn't that put pressure on oil and gas? >> sure. we issued licenses to export natural gas. the real question it will take time to build the truck infrastructure. we're geared to take in energy, not push it out. as a result of that it will take us a year or two to build terminals, the ability to export into the global market. david: bottom line though, the cheapest gas will be at the pump in 2013? >> look i think we'll breach in the first half of the year. may not be long-lived. david: 2.90, 2.89? >> hopefully in that range. i would like to see it. david: nus consulting co-president. great to see you. liz? liz: i will fill my gasoline tank with premium now. go for it. up next it wasn't such a happy new year's eve for one
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